THE government, amidst the Covid-19 outbreak, has requested the World Trade Organisation to extend the existing trade benefits till 2034 from 2024, when the country is expected to graduate from the least developed country category. The WTO wing under the Commerce Ministry made the appeal in the last month, Commerce Secretary Md Jafar Uddin stated, as per a local daily report.
Highlighting Covid-19 outbreak fallout on the country’s economy, the letter, sent on September 27, sought 10-year extension of the preferential trade facilities the country has been enjoying as a LDC country since 1975. Centre for Policy Dialogue research director Khondaker Golam Moazzem welcomed the government initiative as the Covid-19 has destabilised the economy. He said that the government should also negotiate bilaterally so that the country continued to get trade facilities in European countries.
But this is not a good idea. Deferring the LDC graduation process will never force us to see the main problems which prevent us from increasing our economy’s competitiveness. We need, more than anything else, to improve our core competitiveness rather than rely on the mercy of the rich nations to continue to give us favoured nation status because we are poor. Ultimately that should be the objective — although it is more difficult and dynamic to achieve.
That means we must reduce the cost of producing power as well as improve their distribution. Improving the physical infrastructure of our ports to ensure that lead times are shorter is also essential. Most importantly, we need to reduce the corruption in the banking sector so that loans don’t have to be taken by paying bribes. If we can ensure that our workers in RMG are paid more so that they can be more productive and efficient it would also be a good investment in our human capital resources.
Investors won’t invest in RMG in Bangladesh unless they see these events occurring. Cheap land and labour resources are simply not enough. In the end dynamic efficiencies such as the above improvements will enable us to capture the RMG and other essential sectors. Right now many factories are leaving China while China itself has given us zero trade benefits with some conditions. We can negotiate deals with the EU to ensure that we have the same zero tariffs enjoyed by Vietnam. The narrow window of opportunity which we have must be exploited to the nations’ advantage.
